Which of the Following Statements Is True Regarding Marketing Ethics

question 5

Multiple Choice

Which of the following statements is true regarding marketing ethics and social responsibility?

• A) When products are complicated, consumers may be vulnerable to unscrupulous sellers.
• B) Firms should aim to advance their own short-term interests at the expense of customers.
• C) Being socially responsible tends to decrease a firm's costs, but negatively affects its profits.
• D) Consumers only want to purchase products that are safe or good for them in the long-run.

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Definitions:

Profitability

The ability of a business to earn a profit, which is the balance of revenue after accounting for all expenses, taxes, and costs.

Negotiated Price Approach

An approach to transfer pricing that allows managers of decentralized units to agree (negotiate) among themselves as to the transfer price.

Transfer Price

The price at which divisions of a company transact with each other, such as the sale of goods or services, often used for budgeting and tax purposes.

Decentralization

The process of distributing or dispersing functions, powers, people, or things away from a central location or authority.